What's up you bunch of beautiful meatballs, it's your boy trey back again for another video, this one's not gon na, quite be 30 minutes long, but, as you can see by a title, this is part two. I said yesterday that i was going to uh continue on with my the big squeeze theory and uh. I wanted to leave people some time to digest the information that i discussed and today i want to dive into uh, not necessarily the the market maker mechanics and why. I believe this to be the case, but more so uh.

What i think this situation would look like, as always, i'm gon na find advisor. This is not financial supplies. Please take a second assault. Do what you've got to do right now is here to tell you to buy, i'm not here to tell you to sell you're charging your own finances, that's it at the end of the day.

In case you missed yesterday's video. This is going to be in a playlist uh, but i'm gon na give you the tl dr. This is basically my the big squeeze theory. This is uh contingent and and uh partially tied with uh.

I would argue astros video. He had a weapon of a video called uh, the short squeeze weapon, and to give you a tldr case, you don't want to watch the entire video. I believe retail is losing the options game. I don't think that uh, that's a a false statement to make.

I think the data would prove to you the exact same thing uh, and i think that it's a fixable issue - and this is personally my opinion - how market makers manipulate the stock. I go over the details of that. If you'd like to see that go, watch the first video it'll walk you through in pretty great detail how i think that is possible. I also believe if retail changes, the strategy, two things are going to happen.

Implied volatility will rebalance changing how the algo moves the stock. If you don't know what implied volatility is it means that market makers think that a stock according to that implied volatility will go up or down that percentage number and one trading year's worth of time. So a high implied volatility. If you were to convert that uh means you are paying more for a contract right.

High iv equals high contract price. That's just that's just the equivalent! That's what it means. Low iv means a lower contract price. The second thing that i think will happen: uh is this a hedge when called for will accumulate money in retail hands.

Now the big takeaway and the big thing that uh, i think people are controversial about and justifiably so right. I absolutely one million percent accept everything that people have to say right now, because i expected it. I expected uh this to be a controversial topic and not an easy uh concept to sort of swallow, but a hedge which is much different than a trade. By the way, a hedge, when called for, will accumulate money in retail hands.

Now i want to go over all these different things uh in great detail, but before i do, let me just tell you what the value of buy and hold really is in no way shape or form. Am i here to tell you to buy or to sell uh, regardless of of this previous video right? There is true value and buy and hold, and when i say that, i really do mean it because buy and hold is what allowed retail to be able to take a step back. Look like this and say: market makers are, without a shadow of a doubt, manipulating stock price via the options chain and via derivatives. That is a provable provable thing buy and hold has allowed retail to know that there is a liquidity crisis, meaning retail owns 90 percent of the float of amc institutions on about 36 etfs, take up a portion of that and there are likely synthetic synthetic shares that Circulate around on a day-to-day basis from market makers and potentially some hedge funds as well, buy and hold, is great in no way shape or form.

Am i telling you not to do that or telling you to do that? I'm not here to tell you to buy her to sell what i'm here to tell you is some information and some statistics and some data. Let's check this out, i want to dive into historical flow. If you look at the call put ratio over the previous nine months right, let's just go back all the way to june. I have something pulled up.

The website is called market chameleon uh by the way tyler wilson. I appreciate you, he told me to log into this website. I went into this and i didn't realize all i had to do was log in and i'd be able to see all this stuff. I thought i had to pay for it.

I'm not a fan of these paywalls man. I want to i'm too cheap for that, but anyways uh i've got something pulled up here. It's a 30 day implied volatility, as i just mentioned before, iv directly correlates to the price of a contract, whether it's a call or it is a put and there's two things that you're going to notice here, you're going to notice that if you line this up With stock price implied volatility, spikes every single time that there is an increase in stock price, this makes sense right, if you think about it implied. Volatility is priced on two main things: it is priced on.

One volatility - right, i mean implied volatility - is in the name and two demand. So if the volatility is one of these things - and you see, volatility go up as when we ran to 70 back in june. You'd expect implied volatility to also go up, but, as i just mentioned, there's a second factor at play here, and that is demand. Demand also plays a role in implied volatility, and what you're going to notice is that, even though the stock price went down and started to actually slow down its uh, it's it's rate of decay or rate of uh falling whatever you want to say.

The implied volatility stayed pretty constantly high. The only time that we've really ever seen some massive runs by the way is when implied volatility was very, very low back here you can see that it was nearly at 100, which is the lowest. That implied volatility was for quite some time since january of 2021, and back here we also tap back down to 100. This means two things inherently, if implied volatility is controlled by demand and by volatility.

It means that we had a lack of volatility and a lack of demand for the upside of options contracts you come over here. You look at the stock price. That does appear to be the case. You had a lack of volatility and you also had practically the lowest amount of demand for calls that we had seen in quite some time.

In fact that you look back at this and you're going to remember that a lot of retail investors, a lot of apes, were thinking there was gon na be downside to about twelve dollars. That's just the truth of it right. They thought it would go down to twelve eleven ten nine nine dollars, whatever uh, which means that less people were buying less people were buying calls which resulted in the lowest iv that we have seen in quite some time. So, knowing this right, i want to discuss something that i find to be quite fascinating and it is the call versus put implied volatility.

One thing that i don't think a lot of people talk about is that there can be a difference in implied volatility for contracts. For both calls and for puts, if there's more demand for a call contract, you're going to see an overall higher implied volatility which, as we just discussed, results in a higher overall price for the contract right. But that being said, if there's less demand for puts you'd expect, the exact inverse you'd expect cheaper contracts to be had for puts, makes good sense right. So let's just check this out.

If you look at the this is puts right here and we go four strikes out the money. This obviously is not completely correlated but you're going to notice one thing: you're going to notice that one two three four strikes out the money you have about 145 percent. Current implied volatility and a cost about 22 cents per contract, which comes out to 22 dollars in total. If you were to go four strikes out the money for a call right now.

What you're going to notice is one two, three four. It is 164 implied volatility and 43 cents, which is nearly twice as expensive as the equivalent in a put now. Why is this the case? That brings me back to the historical implied volatility chart. I want to show you guys something since june.

You have seen not a single week in which there has been more bearish flow than bullish flow you're, going to notice this down here call volume versus put volume. Why do i find this to be important right? Let's just check this out here. Really quick! Well, bullish flow, bearish flow and usual oils. All this stuff is supposed to really give you an idea of when a stock is looking bullish.

If you, if you see more bullish flow than bears flow, you'd expect the stock price to go up right. Well not necessarily check this out. This orange bar right here orange equals call volume the blue stacked on top equals put volume. What you're going to notice every single week is has always been more call volume than put volume.

Why is this the case? This is my theory, i can't prove you know exactly who's buying these contracts at the end of every single week. All i can do is take an educated guess, but my educated guess uh is one simple thing. I think retail and a small minority of institutions, hedge funds, perhaps market makers, hedging, who knows it - could be a whole lot of different things - buy these contracts. What does this tell you? It means unfortunately, retail's been losing.

It means we're losing and what happens when retail is only buying calls the entire time their stock goes down, implied volatility stays juiced. If i erase all this - and you were to look at this right now - you're going to notice that implied volatility stayed very high for a prolonged period of time, i would argue much longer than would be typical for a stock. That's in a nine a nine month. Downtrend a downtrend, and it's because of one simple thing: even if volatility went down it doesn't matter because demand never did demand stayed high.

Of course you have a huge spike in call and put premium here back in june. You have a spike over here as well as there was a huge run-up, but for the most part i mean what you're going to notice is: there's been almost the same exact level of call put ratio called put volume for nine months. Where does that money go right when a call expires, worthless goes into market, make your hands, you lose it. If people are willing to pay for the implied volatility of the contract, why would you change the price? Why would you change the price if somebody's willing to pay ten dollars for a loaf of bread? Why would i charge two? I mean if you want to go to the ethics of it.

I don't think that's very. I don't think that's very ethical. I don't think what market makers do is very ethical, but from a business perspective, these guys are like well. If these guys are going to pay for it, why would we change the price? It just makes sense, that's what it is, and what you're going to notice is when we got the run up in price, is when call and put volume was the lowest that it had ever been since june? Why you had no volatility? You had a lack of demand.

What happens when you have a lack of demand? You have a lack of volatility, the algos step into the equation. This brings me back to the historical flow of the of the stock. This is actually something that i would like to see unusual whales do so, if you guys want to tweet this at him or whatever, i'm probably going to reach out to him personally uh. But let him know if you want to see something like this.

I think if unusual whales wanted to take it to the next level, what he could do very simply put is compare the current implied volatility of any option that is being pushed on unusual whales to the historical implied volatility. And if you see that the current implied volatility is much lower but all of a sudden there's a huge slap up in volume compared to historical implied volatility, that is almost 10 times out of 10, going to be a great buy, because that shows you a unusual Trade, that's that's a great great sign like if you look over here, for example, you notice that uh out of nowhere, you have this huge downtrend and call versus put premium rolling in and then this huge spike. Well, you know: what's gon na happen, you know what that is. That's that's a that is.

That is a sign that you have an imbalance in demand, leaning towards costs. You have more people uh, specifically algorithms, that are now leaning towards the bullish side. Instead of the bearish side, and that the price is likely going to go up right, that just makes sense uh, which brings me to my next thing. If you look at all the historical implied volatility, you look at sort of the way that supply and demand works.

That volatility, it proc, you know, affects the price action uh, how it affects the way that these get priced in and how uh algorithms are able to move the stock. Please watch my first video it'll it'll, walk you through the entire process and how i think the market maker algorithms manipulate the stock uh. What is there to say the money lost on contracts to me does two big things: one. It passes money into the abyss.

It is a wasted opportunity for people to be able to positively impact their lives and two it creates a gambler's mindset. Now this is a hard pill to swallow, but i'll be the first to come out and say right. I have made poor options traits i have. I made emotional traits and it's very easy to do and when you put yourself in a constant state of emotionality, you are going to view a ticker a chart in an entirely different manner: a community in a tightly different manner and money in an entirely different manner.

Because all that we view things as right now is green, equals good and red equals bad, and there are ways to protect ourselves from this. So the moral of a story to me is people say you know trey. If we change our strategy, market makers are just going to adjust, we're just going to lose, retail's been losing, we've been losing, but it's just the truth. It's a it's a really hard pill to swallow.

I hate having to say it, but the data's here you have. You have not seen a single week since june, in which retail has not had more calls than puts. You know, and i think this is this is my theory. This is the this is the the icing on the cake is.

I think that market makers use implied volatility to pick which side to lean towards when calls are cheaper, which they're? Currently not you know, and let me tell you, okay uh even if today was green. If today was red, wouldn't have made a difference towards my theory. This is not some sort of, i told you so in the least bit don't interpret it that way, because i think it would take one to two months to even be able to validate whatever whatever i think it could potentially happen. Uh.

It's not validatable in a single day, you know today it could have been 10 green and i still would have been saying the exact same thing with that being said, market makers want to lean towards whatever's, cheaper, their algorithms are programmed, and i'm going to write this Out just so, it's it's rememberable right, memorable, whatever uh their algos are programmed to just buy or sell. What is the cheapest? That's it. You see, that puts are cheap right now. You see you can buy a 22 cent.

Four strikes out the money put versus a 43 cent call alco's, probably lean that way. That's just how it is that's how they work. That's how these algorithms are programmed is all right. This is cheaper they're, not people loading into this.

So let's push it down. This is cheaper calls are cheap, nobody's loading into this. Let's push it up, that's how these things work. You know which brings me to my next thing.

So what right, so? What i think, there's three main takeaways and i think, there's three things: that retail can do to improve sort of uh our situation and understanding of options, because options are not inherently bad options have helped retail get to the situation that happened back in january happened back In june, created gamestop created, ater created sprt. None of those things would have been possible without options, but we can we can sharpen the sword. You can sort of uh change the way you can. You can sharpen the method right, that's it.

At the end of the day, there's three things for me: one lotto calls and in no way shape or form my disrespecting rico. I checked in with him before i stated this in the video and we actually had this talk one-on-one last night for quite some time. A lot of calls to me are not a good thing. A lot of calls are dangerous.

They create a bad mindset. It's it's the question of what, if this could happen in no way shape or form, should we associate what if, with this stock or with any stock, i don't think it's healthy to put yourself in a situation where uh you have an itch where you need to Look at the one-minute chart where, where you need a certain uh price level, to hit at a certain time that is unhealthy, you can't maintain that that puts you in a state of emotionality and it creates too broad of swings in the way that you're going to View uh the chart: it's going to turn you off, it's not sustainable to to have those sorts of high swings and high and low lows back and forth back and forth back and forth. I don't think it's healthy right. I think this is something that happens and let me tell you: i've got a lot of love for rico, but i only mentioned this because uh him being a good friend of mine, was up a couple hundred g's and uh ended up walking away.

You know in a whole different state of mind that was possible and, to me it was avoidable uh if it weren't for a lot of costs. He knows that. I know that right, it seems, it seems like it makes sense uh, but this happens far more than i think that it should. I think, that's an unhealthy thing for for people to to to ride on number two lack of education.

I don't think options are. I don't think the answer is to just step away from options. The answer isn't, if i don't understand something, let's just uh: let's just tell everybody not to do it. The answer is education and it almost always is in every single situation.

To me, options are only a bad tool if they're used wrong if they're used in a bad in a bad way. If you wanted to go hammer a nail into a block of wood right but you're, using like a can of coke well duh, this is all you're going to do - is crack that can of coke open and spray it over your face, you're going to be pissed Off, of course, you're using the can of coat crown, you should be using a hammer whatever right in this situation. I think for those who maybe want to use options or are using options, but don't know we have to solve that problem. There is an undeniable fact, an undeniable statistic that retail plays options.

It's just there. Amc is one of the most heavily traded derivatives markets in the entire us stock market. This this thing sees volume like like, like uh, like i don't know like like an ocean full of fish and they're going they're getting made into fish sticks. That's a lot of fish sticks right.

You got, you got a lot of fish sticks on this chart dude. It's a lot of volume, so the education is going to be huge, because the moral of the story here is people are going to play options, no matter what they are. They are it's just. We cannot debate this.

This is just fact whether we like it or we don't like it. This is fact it's fact it's absolute fact. It is so. Education is the answer when you don't know how to play options, i think it's okay to take a step back.

I think you should take a step back and if you do want to play options. That brings me to my third point: perma bias, and i think that a great analogy that i have for this very simply put our whales in the economy. Now there are bad whales out there. There are whales who genuinely just want to see the economy burn to the ground, but i think there are also whales, maybe less than the bad ones, but there are whales that want to see the economy grow.

They want to see businesses thrive, they want to see uh. The evolution of man and woman continue to turn the gears. It makes sense. Why wouldn't you, but at the same time there are also moments in time in which the economy that they love and want to see grow is in a state in which it is not possible to make money by being a bull.

It's the truth. Are they going to take away their permabull bias? No, they want to see the economy thrive, they're going to continue to to play the bull side of things, but at the same time they do a hedge they hedge for the downside, anticipating the pressure, while also believing in the stock. A great example to me is tesla right, if you believe in tesla, you think tesla is a fantastic company and you want to play it as a bull. I can guarantee you one thing.

I can guarantee you that, if you're playing calls throughout all this, it would be very difficult to make money. It'd be very hard. It'd be difficult right if you want to be sort of a bystander investor and all that you're doing is buying and holding a stock, and you never look at the chart except for maybe once or twice a year. That's beautiful! You can do that! You can do that, but i don't think it's healthy to be watching the chart every day.

If that's what you want to do, if you're watching the chart every day and you're trying to make money on a day-to-day basis, you're hoping for something on a day-to-day basis. I think it's good to protect yourself by hedging. This does not mean full porting, and this brings me back to my whale analogy. Whales will hedge, even if they have a permeable bias.

They will know that the economy that they want to grow is in a state for the next. I don't know, maybe one two three months. Let's just say this is 2008 or something right, they'll, look back in 2008 and say this is obviously this is terrible. I mean things, look terrible right now: it's gon na be really hard to make money as a bull for the next year, so what they do with their permabull bias them, knowing that they want to see the economy continue to grow, will make money by hedging.

For the downside, until the bullish market returns, i think if we can fix these three things, the lotto call mindset the lack of education and the permeable bias. This stock will fundamentally shift. You will literally get to see in front of your eyes the algorithm from the market maker, buy and sell this stock differently without a shadow of a doubt. If, if three months from now, we see this call put ratio change so that it actually matches the supply and demand of the actual stock, you are going to witness the way that this stock trades literally change.

Without a shadow of a doubt, i can say that with the utmost certainty in my mind, and i want to bring it into this, what would happen? These are two scenarios to me that i've got painted out uh. What would happen if those who don't know options shout out and those who do play the chart and not the bias? It's very simple to me number one iv rebalance implied volatility and to me the most simple way. If you don't want to look at implied volatility or any of the mechanisms behind that think of it as an algorithm rewire or the way that the price actually moves, see if, if market makers, when we accept the theory that i mentioned in my previous video, if Market makers are simply looking at calls and puts and which is cheaper right. They're looking at at puts right now and they see that these are cheaper, because both of these things are moved by two things: volatility and by demand and if calls have way more demand, which means they're, more expensive market makers lean towards puts right.

Well, what's gon na happen, they're gon na lean towards puts the stock price will go down. Why is this the case? Why our call is more expensive? It's not because of volatility. It's because of demand there's a lack of volatility that has happened over the last nine ten months, but calls stay expensive while puts stay cheap and it's because nobody buys puts in this scenario. It makes sense for the market makers to push the stock price down, because that's just cheaper, that's what their algorithms are literally wired to do is to make them money.

Is it ethical? Is it right? No, i think it's manipulation. It's awful it's crooked, but that's the game. There really is, and until we have more money than market makers, you can't change it. You will get to watch this absolutely change.

The iv rebalance meaning how much it costs for a call and how much it costs for a put will change to actually match supply and demand. Based on what the chart says, number two: you keep more money in your pockets and you get to accumulate shares now. This doesn't mean that you should be full porting uh puts, i think, that's stupid. I really do i.

I see people on on twitter, quoting you know that portion of my video that 30 seconds on my video and saying trace, telling everybody to buy, puts listen uh. What i genuinely want for people is to make money to be able to wake up in the morning and no matter what the chart is doing be happy, not because it's green, not because it's red to be able to sit there as a permabull as an ape. As a man of retail or a woman of retail and say you know what i know that six months from now a year from now a year and a half from now, my stock is going to be worth more than it is right now and that today It's okay, if it's red, because i am hedged, i'm protected against that downside price action. It is not inherently bad to protect yourself if you're gon na full port puts don't even bother.

That's stupid, that's dumb! Oh! That makes absolutely no sense right. It's it's! This comes back to what i mentioned before, which is that lottery mindset you're trying to make a quick buck right. But if you're hedging and you understand how options work, you protect yourself. If the stock goes down, you're hedged with a put, because you understand how charts work, you understand the mechanics behind options, you're looking at implied volatility you, you really have a full understanding of the grasp of how how things move right and you've hedged.

Well, you just made money on your puts so when, when it finally bottoms out you cash out on your puts, you have made your money, you have not lost a dollar your happiness and your emotionality is not dependent on grain is good and red is bad. That is not sustainable. Let me tell you something: the thing that is maybe the most sad over the past year and a half - and this is the genuine truth - is how many people have left because of the drastic shift and emotion of the ups and downs of the way that this Stock moves because it's avoidable, i really think it is. I think that this is drastically avoidable by simply protecting yourself.

You are not going to have a bad day if you are hedged with a put. If the stock looks bearish and you can see the chart and look at it and say this looks pretty bad and you decide to hedge with puts right, you're going to be protected at the same time right. If we look at a chart - and we say that it looks good and it actually genuinely looks good and you play calls that are not lottos, these things fall into the same category right you shouldn't play, puts as a lot of you shouldn't play, calls as a Lotto you shouldn't uh, you shouldn't hope for the best and expect the worst right. You want to set yourself up for the most success possible if you're genuinely playing the supply and demand in the chart, setup and no bias, while also maintaining the stance of.

I think that this stock can have a nice move. You are never going to have your happiness, sit on something that you cannot physically control, which is the way that the price moves on a minute to minute hour to hour-to-hour day-to-day perspective. I genuinely think that i think this is a good thing that was a lot to unpack. I wanted to be able to dive deeper into the theory i spent most of the previous videos sort of uh explaining why i think market makers are big pieces of uh.

Of donkey and uh, i wanted to dive into more of the the theory itself. What i think retail can do to sort of improve the situation uh, because there's lots of people who who get it. There are some people who don't and i'm not here, to judge or blame any of you at the end of the day. This is drastically different.

This is i've never even mentioned anything like this, so uh, please coming from me personally. If there are those who disagree with me - and you agree with me - don't bully anybody who disagrees with me. I want no beef with anybody. I genuinely don't what i want for everybody is to see this change.

This wasted money, this pissed away money, because at the end of the day we can say one thing with absolute certainty: options helped create and were a big part of every big move that amc has had every big move the gamestop has had and every big move That any meme stock has had they're essential, but it has to be done right. We can't be playing lottery tickets and when we're not in a bullish situation, we have to protect ourselves. It's that simple. I really do genuinely think.

That's what it is. I think we just simply have to evolve so my final thoughts right education, i think, if you want to learn about how charting works, how options work. I have a video uh that i can even link in the description box down below, but it is called the options and charting master class. It is uh right here for you it's an hour and 20 minutes long.

It's lengthy! If you want to take it in chunks feel free to do so. Uh, i think it is. It is helpful. I think it's going to teach you a lot of things.

If you don't understand options, i personally believe it is best that you don't play them. I don't think it's a good idea at the end of the day, if you're not interested, listen, just buy and hold. I really think that's okay, but you shouldn't be paying attention to the day-to-day price action. I don't think that's for you.

I don't. I think we have to take out the emotionality and the day-to-day sort of swings behind uh the way that uh the stock moves. If this is the perspective that we want to take of of just passive investing, that's okay, i'm absolutely chill with that. That's a good strategy.

That's totally! Fine! If you like tools, i have crossover indicators in my discord, they're, absolutely free. My discord will always be free and we are going to be adding amc and gamestop to these, so that you can track sort of the way that these stocks move on a bunch of different time frames. I'm not telling you to buy or sell calls or puts stock, whatever the end of the day, it's a tool that is there for you to do whatever you want to do with, and at the end of the day. I think if you want a real moaz, i went over this in my my previous video uh.

There's two scenarios here, i think scenario one which is where we're currently sitting. I think you see rips huge rips, followed by long periods of slow bleeds. I think that's just the way this is gon na squeeze. I think it's gon na be a lot like tesla.

I think scenario two, which is the retail scenario where we kind of clean up the game a little bit right. We clean up our axe a little bit scenario: two is a more clean tesla squeeze rips, followed by dips, but not shadow rum dips, they'll be supply and demand-based dips, where you can see physical growth in the company and i'll. Tell you what, if there's one thing that i would be genuinely happy with satisfied with it would be to see this company amc. Look like like a contender on the chart.

I think that would be the most sexy thing ever to be able to take a step back and say holy. Look. How far retail came. I genuinely think that's possible, that's my thoughts on this video and if you have any more questions, i think i addressed most of the things in the previous video.

I read the comments very closely. That's where a lot of the topic of discussion came from today. I want to be able to really dive into it, uh in great detail. If you have any more questions, please drop them down below be respectful to each other uh.

If somebody disagrees with me or you be good people right, love your neighbor whatever, and that's what i've got for this video so i'll catch. You all later appreciate you much lovely taps. Peace.